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2019 (11) TMI 339 - AT - Income TaxExemption u/s 11 and 12 - principle of mutuality - income of the assessee is received from members as well as non members - Whether assessee society will be assessed as normal AOP - HELD THAT:- The differential membership subscription is only fixed to recover higher subscription from those having larger turnover, while seeking to support fledglings/new entrants. The membership based on the turnover, carry differential voting rights. However, uniform service is provided by the assessee to all categories of members, irrespective of the membership fee paid. No specific services are being provided to members in lieu of payment of higher membership subscription charges. During the relevant previous year, the assessee received gross amount of ₹ 20.84 crores on account of annual membership subscription from members. In the return of income, the assessee, claimed exemption in respect of an amount on the principle of mutuality, arrived at, after reducing/allocating expenses incurred during the year out of gross membership subscription receipts. As submitted that on the issue of exemption claimed by the assessee on the basis of principles of mutuality have been decided by the CIT(A) in favour of the assessee for the A.Y 2009-10. CIT(A) reproduced the submissions of the assessee and order of Ld. CIT(A) for AY. 2009-10 in the order and following the same, deleted the entire addition observing assessee has also shown the amount received from non-members as income. The exemption has been claimed on income which is received from the members of the association on the principle of mutuality. It is also seen that the indirect expense has been duly apportioned and the services provided to members are same irrespective of the membership fees & voting rights being different. The assessee has also relied on various case laws on the principle of mutuality. After considering all the facts and circumstances of the case which are same as that of A.Y. 2009-10 and A.Y. 2010- 11 benefit on principle of mutuality be granted to the assessee on membership fees from members only Further due credit to TDS & Advance Tax may be given after verification - Decided against revenue
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